Also in this section: Research Published Articles GFP periodically publishes newsletters on topics of interest to timber investors. Brief summaries of recent newsletters appear below. All are available to clients and qualified prospective investors by contacting GFP directly (see Contact Us). Summer 2008: Russian Export Log Tariff Impacts In this issue of the Investment Perspective, we present our views on the implications for global log prices resulting from the staged increases in the Russian export log tariff. This includes a review of the history and rationale for the Russian tariffs; a summary of the countries that will be directly impacted by any supply disruptions of Russian log imports; and an assessment of those log exporting countries most likely to benefit as sources of replacement supply. We conclude with a discussion of the potential impact on global log prices resulting from reduced log volumes from Russia. Spring 2008: U.S. Timberland Returns in 2007 In this issue, we present our annual review of U.S. timberland performance. This includes discussion and analysis of the NCREIF Timberland Property Index returns against other performance indicators, a review of the fundamental drivers to timberland returns, and an analysis of timberland values relative to fundamentals. We conclude with a brief discussion of alternative means available to investors to gain exposure to the asset class. Spring 2006: Trends in U.S. Timberland Ownership On the heels of what has been described as the largest private market timberland transaction ever, GFP presents an analysis of U.S. timberland ownership and changes that have occurred over the past twenty five years. We then present attributes of the non-industrial private landowner in the context of transaction sourcing, and discuss implications for the institutional timber investor. Spring 2005: The Contribution of Currency to Total Investment Risk In this issue, we evaluate the contribution of currency risk to total investment risk and explore how a knowledgeable investment adviser might consider currency risk in ex-US timber regions. We believe currency risk should be considered independently of investment risk, and show that the contribution of currency to total price risk can vary by country. While price risk is by no means the only risk factor to consider, it can be a significant component of an investments overall risk budget, and therefore is a fundamental component of a rigorous due diligence process. Fall 2004: Demographics and the Impact on Wood Demand Given the long-term nature of the timberland investment class, investors are necessarily interested in a long-term view of demand for timber products. In this article, we present a review of the relationship between demographics, housing markets, and the implications for timber demand. Summer 2004: Trees Grow! How Is That Important? Anyone who has contemplated an investment in timber has recognized the obvious differentiating nature between timberland and other asset classes - with timberland, the assets which constitute the majority of the investment change in value over time because of the inherent biological growth of the trees. While it is easy (and often convenient) to attribute most of the expected and actual return from the asset class to this unique feature, traditional finance theory demonstrates why this logic is flawed in today's market for timberland investments. Winter 2004: Global Supply & Demand for Timber An understanding of the projected global supply and demand of timber is important in setting investment strategy, whether for designing an allocation policy or determining the appropriate silvicultural regime. In this article, we present projections for supply and demand by major timber- producing regions and evaluate the implications for an institutional investor’s timber portfolio. Fall 2003: Large Tract Discounts: Does Size Matter? There is a widely held belief within the institutional timberland investment community that large timberland transactions are more favorably priced at acquisition than smaller timberland sales. The existence of this so-called “large-tract discount” has spawned several timberland investment strategies, ranging from the acquisition of very large properties that are subsequently parceled among institutional investors, to the aggressive disposition of very small tracts that have higher values than operating timberland. In this article, we evaluate empirical evidence for the U.S. South and the merit of such investment strategies. Fourth Quarter 2002: The Portfolio Impact of Ex-US Timber Investments The majority of institutional investments in timberland have focused on the U.S. market, but that trend is changing with the increased influence of non-U.S. regions on global timber markets. We present a model of how investors can evaluate the portfolio impact of adding non-U.S. investments, subject to their tolerances for risk, and design a more efficient timber portfolio. Third Quarter 2002: Globalization of the Forest Products Industry The forest product industry is becoming more global, with market shares changing, technologies being adopted across different regions, and capital costs converging. This globalization has, and will continue to have, consequences for regional timber markets, particularly with respect to timber and log prices. Institutional investors in timberland should evaluate globalization of the industry in designing a timber portfolio.